NOKIA: The Ring Just Got Louder

VOICE&DATA's estimates show that Nokia India's revenue in FY 2003—04
was Rs 3,181 crore. Its revenue from GSM mobile phone sales in FY 2003—04 was
Rs 2,301 crore. This is almost a 150 percent growth over the FY 2001—02 sales
of Rs 926 crore. In 2003, the vendor also made a dent in the Indian CDMA phones
market. VOICE&DATA estimates that Nokia would have sold CDMA phones worth Rs
180 crore to Reliance Infocomm and Tata Teleservices. The vendor's revenue
from network infrastructure sales was around Rs. 650 crore. An estimated Rs 50
crore would have come from enterprise security products.

Several factors have contributed to what Nokia has achieved in India during
the past one year. The most important of course is the telecom environment in
the country, especially the tremendous growth that cellular services witnessed
in the past couple of years. During 2003, the India market for mobile phones
grew enormously in terms of volume, and Nokia being the market leader in GSM was
the biggest beneficiary of this growth.

HEADS Nokia Mobile Phones: Sanjeev Sharma (L) Nokia Networks: Ashish Chowdhary (R) Area of Operations: Mobile phones, mobile network infrastructure, enterprise security Address: Nokia India Private Limited, 4F, Commercial Plaza, Radisson Complex National Highway No. 8, Mahipalpur, New Delhi -110 037 Tel: 011-677 9000 Fax: 011-677 9146 Website:www.nokia.co.in V&D estimates CyberMedia Research HIGHLIGHTS Nokia India's revenue from GSM mobile phone sales in FY 2003—04 was Rs 2301 crore Nokia brought in phones that took care of the price sensitivity of the Indian buyers, also made phones especially for India FY 2004—05 is likely to be good for its infrastructure business. It has already bagged two orders worth $299 million from Bharti and Idea Cellular.

Besides, Nokia's effort at addressing local market sensitivities both in
terms of price and other elements helped it gain an unbeatable edge in the
Indian market. Past year, Nokia introduced 17 new models of phones in the Indian
market. Its large distribution network made of some 10,000 dealers across the
country, aided its pan-India market penetration.

What contributed significantly to Nokia's success was also the fact that
not only did Nokia brought in phones that took care of the price sensitivity of
the Indian buyers, but also made phones especially for India. Its "made for
India" phone, Nokia 1100, is a case in point. The low-end Nokia 2280
handset based on a Nokia-designed CDMA2000 1X chipset was also meant primarily
for the Indian market.

However, Nokia was nowhere close to scripting a GSM-like success in the
mobile networks business despite a growing demand for network infrastructure.
However, it did expand its infrastructure business with new projects as well
expansion orders for radios and mobile switches from Hutch (Karnataka, UP
(east), Rajasthan and Gujarat, Idea (Delhi and Andhra Pradesh), Bharti (Chennai),
and BPL (Kerala, Maharashtra, and Tamil Nadu). Nokia supplied both radios and
MSCs in all these circles except in Kerala and Maharashtra where it only
supplied switches.

If the current rates of growth in the mobile subscriber base are any
indication, Nokia would continue to have a great time selling its phones in
India. While, in 2004 Nokia expects that the global mobile device market volumes
would grow by somewhat over 10 percent from an estimated 471 million units in
2003-the growth would continue to be much higher in India. Nokia is expected
to push its CDMA phones aggressively in the Indian market as it considers the
country as key to increasing its share in the global CDMA market. However, here
it would have to play second fiddle to Korean vendors for some more time.

In the mobile infrastructure space, FY 2004—05 is likely to be much better
for Nokia. The Finnish vendor has already bagged two orders worth $299 (approx.
Rs 1,350 crore) million from Bharti and Idea Cellular. While the Bharti order is
worth $275 million, the Idea one is $24 million. Nokia will supply both core and
GSM/EDGE radio network equipment to build or upgrade Bharti's networks in five
telecom circles in a deal that also includes the full management of Bharti's
network by Nokia.